[First published in 1984, since when the Halifax Building Society has turned full circle by converting itself into a bank].

In the world of finance, Halifax means its Building Society, the first in size in the country. It originates in the amalgamation, in 1928, of two societies, the Halifax Permanent (founded 1852) and the Halifax Equitable (founded 1871). Neither could claim to be a pioneer of the building society movement, although when the former was established, permanent societies were still sufficiently novel for the word to be included in its title. Nor did these two have a monopoly of the town's business, in which there have been at least six societies. Yet by 1928, they were, respectively, the largest and third largest building societies in the country. There must be something unusual about a town which could produce two such giants.

One reason could be its relatively isolated position. Surrounded to the south and to the east by a chain of hills, communications before the days of canals was practically confined to Leeds. In the nineteenth century the area was described as being in a "great waste and moors where corn and grass could scarcely be seen". But the hills had advantages in the form of numerous streams and rivers usable as water power and transport, as early as the fifteenth century. Halifax became an important centre for wool. In the 1560's, the decay of York's industry was attributed to Halifax's superior water power. Thereafter, growth was continuous to at least the end of the Napoleonic wars. At first, cloth went to Leeds by packhorse, where it was finished and repacked into individual customer lots before being sent by water to Hull for onward shipment to London or elsewhere. By 1700 transport to Leeds was by water, and after 1758 Halifax was connected directly to Hull by means of the Calder Navigation canal. The town was now independent of Leeds and could build its own dressing shops and dye works. It also created an export trade chiefly to Portugal, Turkey, Guinea and the Levant. Halifax seems to have been remarkably adept at avoiding the depressions of the wool industry. In the early days it moved into worsted goods, the rapid growth of which contributed greatly to the decline of the traditional English cloth. In the 1780's cotton manufacture was introduced into the area, followed by textile card making, carpets, and later wiredrawing and engineering.

The worsted trade had been largely developed by the Akroyd family, one of a large number of Halifax families known for their philanthropy, not only in the conventional Victorian tradition of charities and public buildings, but also in the founding of thrift institutions. Akroyd, Crossley, Mackintosh, Rawson, Swain, Pollard, Briggs and others are names occurring in succeeding generations as benefactors of the town and incidentally, as its leading bankers or bank directors. Edward Akroyd founded the Yorkshire Penny Bank in 1852. It was based not in Halifax but in Leeds, but when it re-registered in 1871 it remained true to its origins, for eight of the eleven guarantors of the bank were Halifax men. Akroyd was also associated with the chairman of the National Savings movement during and after the Second World War. Across at Huddersfield, eight miles away, Charles Sikes, another banker from a banking family, was the driving force in the establishment of the Post Office Savings Bank.

Perversely the origins of banking have nothing to do with thrift, but instead arise from trade and the difficulties of making payments at a distance. The earliest bank in Halifax was established in 1779, about the time that the town was becoming less reliant on Leeds. This was the commercial Bank of Hainsworth, Holden, Swaine and Pollard. Of these, Swaine was a worsted manufacturer. No doubt his cloth sales gave him funds in London, where he owned a bank with his brother. A profit could be made by allowing other Halifax merchants to draw on his London funds for payments there, repaying him in Halifax. A perfectly conventional reason for the start of a provincial bank. Pollard was also a partner in the Bradford Bank. This failed in 1781, and there- after his name disappears from the Halifax firm, but his family was associated with later banking enterprises. Soon after, the Commercial Bank became Brothers Swaine & Co., but collapsed in 1807, with some £64,000 outstanding in banknotes, and £42,000 in drafts. However, the Swaine's worsted business survived.

In 1791, the Wakefield banker, Ingram established a Halifax branch. Probably the branch became more important than the head office, because in 1809 the Wakefield business was sold. However, the Halifax bank did not survive the failure of its London agent in the crisis year of 1816.

The remains of the Swaine's bank passed to their major creditors, John Rawson, John Rhodes and Rawdon Briggs, and these formed a successor bank until 1811, when the partnership split. Rhodes and Briggs, both mill owners, continued as the Halifax Bank, in which they were later joined by John Garlick, previously a clerk at Swaines. The Rawson family started a new bank, with a branch at Huddersfield. Both firms prospered, giving the town many years of stable banking and surviving the troubles of 1825 with ease. Unlike many other strong private banks, however, they were not bound by traditional ways of working and both converted into joint stock banks in 1836. Briggs & Co. became the Halifax Commercial Banking Company and the Rawsons, the Halifax and Huddersfield Union Banking Company. No doubt they were influenced not only by the actions of each other, but also by the formation, in 1829, of the Halifax Joint Stock Bank, one of the earliest of the joint stock banks.

The Yorkshire District Bank opened a Halifax branch in 1837, but it may not have survived that bank's absorption by the Yorkshire Bank, which in time became part of the Midland Bank, and is not to be confused with the present name of the Yorkshire Penny. In the 1880's and 1890's more outside banks arrived: the London and Yorkshire; the Lancashire and Yorkshire and the Mercantile of Lancashire. Then the two building societies joined in. They considered that the lack of cheque book facilities inhibited their growth - a story with a familiar sound to-day - and, accordingly, each formed their own bank. In 1899 and 1909, respectively, the Equitable established the Halifax Equitable Bank and the Permanent, the Halifax and District Permanent Banking Co. Ltd. Each was independent of its building society, but each largely utilised the management, staff and offices of its associated society, into which much of its surplus funds were placed. Another dual capacity organisation, the Birkbeck bank and building society collapsed in 1911. Thereafter, the public were inclined to distrust these organisations, so in the due course the two banks were sold. The Permanent went to the Union Bank of Manchester and the Equitable to Martins. Both are therefore now part of Barclays. Nevertheless, for a short time, the town was the headquarters of five joint stock banks, something of a record. True, in 1837, Liverpool could boast seven, but three of these failed within less than two years of life.

The three original banks retained their independence for a remarkably long time in the face of the aggressive attempts made by London and Manchester banks to form national networks. This forced the Halifax Joint Stock Bank to abandon its policy of confining its activities to a single office, and instead it opened a number of branches, all in the locality. In 1910, it amalgamated with the Halifax and Huddersfield to form the West Yorkshire Bank. As such, it survived another eight years, until November 1919, when it joined the Lloyds group. Eight weeks later, the Halifax Commercial was absorbed by Martins, chosen, incidentally because the Treasury was seeking to establish a sixth major banking group and would not allow any of the then 'Big Five' to take over the Halifax.

The town's banks have always issued notes: indeed the area has been notorious for small denomination notes of doubtful value put out by traders and small shopkeepers. Ingram's notes had displayed a vignette of the Halifax Piece Hall (also known as the Manufacturer's Hall). Opened in 1779 at a cost variously reported as £9,692 and £12,000 it consisted of 315 cubicles on three floors which were rented out under strict regulations for the sale of cloth, presumably by piece. The scene was later used for Lizars' notes for the Halifax Joint. The notes of Rawson, Briggs featured a beehive beside a tree. When the firm split, the vignette was shared, the Rawsons acquiring the beehive and the Briggs the tree, to which they added their monogram and two sheep. In 1826 it was replaced by the hanging sheep, familiar as an emblem in various towns in Yorkshire, and this was retained for the notes of the Halifax Commercial.

The West Yorkshire and the Commercial were the last of the bank note issuing joint stock banks in the country. There were only nine such banks when the Halifax and Huddersfield surrendered its note issuing rights in 1910. The town's building societies had pursued one policy - to grow nationally. The banks had followed the opposite course - to remain local. Both achieved remarkable success, and, in their various ways, contributed greatly to the development of modern financial systems.